2024-09-12 03:36:58
Fenalco President Jaime Cabal, as well as experts such as former Finance Minister José Manuel Restrepo criticized that the initiative will modify sensitive taxes for Colombians, when other decisions were expected
HUILA DAILY, CURRENT NEWS
Fenalco President Jaime Cabal stressed the need to thoroughly review the implications of tax reform at a time when the Colombian economy is undergoing significant difficulties. The economic slowdown not only affects large companies, but also has a direct impact on small and medium-sized enterprises (SMEs), which represent an important productive sector in the country. Cabal stressed that these SMEs are already facing serious difficulties due to high operating costs and previous reforms, and that a new tax burden could lead to more business closures, thus increasing unemployment and informal employment.
One of the most sensitive points is the impact that the reform would have on Colombian households. In a context in which inflation has considerably reduced the purchasing power of families, any measure that increases basic costs, such as gas or fuel, would end up directly affecting the middle and lower classes, who are already struggling to maintain their standard of living. The introduction of a new carbon tax, which would be reflected in the price of natural gas, is seen as one of the most regressive measures, as it would impact millions of households that depend on this service for their daily needs.
Former Finance Minister José Manuel Restrepo warned of the danger of approving a tax reform that does not have a long-term structural approach and is more focused on resolving the immediate fiscal deficit at the cost of compromising future growth. Restrepo said that the reform seems designed to finance excessive public spending rather than encourage investment and job creation. For him, it is essential that any proposed reform be focused on strengthening the country’s economic base, promoting private investment and guaranteeing a favorable environment for entrepreneurship and the formalization of employment.
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Among the most controversial measures of the reform, Restrepo highlighted the reintroduction of the presumptive income tax, a model that penalizes companies by imposing a minimum tax, regardless of their actual results. According to Restrepo, these types of measures discourage investment and business growth, while encouraging tax evasion.
Both experts agreed that the proposed reform would also affect the country’s efforts to advance the energy transition, a key objective on the current government’s agenda. By increasing VAT on hybrid vehicles, which are considered a cleaner and more efficient alternative, a contradictory signal is sent about the country’s priorities regarding sustainability and the environment.
In conclusion, both Cabal and Restrepo urged the Government and Congress to rethink the need for tax reform at this critical moment. Both agreed that, instead of raising taxes, greater emphasis should be placed on reducing unnecessary public spending, combating corruption that drains state resources, and implementing policies that promote long-term growth and investment. For them, the priority should be to reactivate the economy and not aggravate the situation of Colombian businesses and households with higher tax burdens.
Photo 1: Jaime Cabal, president of Fenalco, warned that another tax reform is inconvenient, because “we have a slowing and stagnant economy.”
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